Shares of Mellanox Technologies (MLNX) are down sharply today but TheStreet's quantitative service upgraded the stock. Do we have a disconnect or a timing issue? I don't know but the charts can speak for themselves.
In this daily chart of MLNX, above, we can see it just filled an old gap from April before reversing direction. The market has not closed at this writing but MLNX is testing the rising 50-day and 200-day moving averages. The daily On-Balance-Volume (OBV) line has recently turned lower. There is a bearish divergence in June and July between the higher highs in price but the lower highs from the 12-day momentum study. Momentum was weaker on the second rally.
In this weekly chart of MLNX, above, we can see prices are above the rising 40-week moving average line, but this week's price action has not been posted. Further weakness on Friday could give us a close below the 40-week average line. The weekly OBV line is pointed up, but that too could change on tomorrow's close. The Moving Average Convergence Divergence (MACD) oscillator is barely above the zero line and could cross again to a new sell signal, depending on the price action.
Bottom line: A close below $46 is likely to weaken the chart of MLNX despite the quantitative upgrade. "Don't fight the market" is sound advice.